Employment growth slowing with 187,000 jobs added in July
Zachary Halaschak
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The economy added 187,000 jobs in July, the Bureau of Labor Statistics reported Friday, reflecting a slowdown in the labor market as the Federal Reserve tightens its monetary policy.
The number of payroll jobs added over the previous two months, adjusted for seasonal variation, was also revised down by 49,000, suggesting that the pace of job growth has fallen off.
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The slowdown could complicate the White House’s efforts to credit President Joe Biden for the strong job creation over the past year.
It also suggests that the Fed’s rate hikes are beginning to have a greater effect on the broader economy and could solidify expectations that the Fed will not raise rates further.
Still, Friday’s report gave a picture of a labor market that is still strong. The unemployment rate ticked down a tenth of a percentage point to 3.5%, a very low figure historically. And job growth is strong enough to suggest underlying momentum in the economy.
The Fed has carried out a historic effort to tighten monetary policy in response to the inflation that has wracked households over the past few years. Annual inflation, as measured by the consumer price index, fell from more than 9% last June to just over 3% this June.
GDP growth for the second quarter also outpaced consensus expectations at a 2.4% annual rate — showing that the economy is humming right along despite the Fed raising interest rates to the highest level in more than two decades.
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Despite the positives, there are some signs of a weakening labor market.
The number of job openings in the United States decreased to 9.6 million in June. While still relatively strong, the decrease marks the lowest level of job openings since April 2021.